What is a Real Estate “Closing”?
A “Closing” is where you (the Buyer) and us (your Buying Agents) meet at the closing attorney’s office with all or some of the following individuals-- the Seller, the Seller’s Agent, your lender and the closing attorney-- in order to transfer the property title to you. The purchase agreement (or contract) you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. Most closings take place at the closing attorney’s office.
When the property is financed, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.
At closing, you will be required to pay all fees and closing costs associated with the transaction along with your downpayment. As your realtor, we will go over the Closing Disclosure with you which will show you the dollar amount that you will need to bring to the closing table. Your attorney will ask you to have the funds wired directly from your account to the attorney's account and they will provide you with instructions on how to do so. Even though this is a direct wire transfer, some banks may take a couple days to process the wire. You will not be able to receive the keys to the home until all the documents are signed AND the attorney has your funds in their account.
*If you sign all the documents and the attorney has NOT received your funds, this is called a dry closing. In this scenario, the attorney will hold onto all of the keys to the property until they obtain the funds, at which point you may pick up the keys to your new home!
What is an Escrow Account?
An escrow account is a neutral depository held by your lender for funds that will be used to pay future expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums. Your regular monthly mortgage payment will include one-twelfth of the annual amount of these bills. When the bills are due, the lender will then pay them on your behalf with funds taken from the escrow account. At closing, it may be necessary to pay enough into the escrow account to cover these amounts for several months so that funds will be available to pay the bills as they fall due.
Escrow accounts are set up to guarantee that the lender’s interest in your property is always protected in case of failure to pay property taxes, or total/partial loss (due to fire, etc.) of the property.
There is a lot of work that goes into closing a real estate transaction. Having a team of experienced experts behind you is a HUGE advantage! We are here to make your home purchase EASY and SMOOTH. Call/text 843-900-0155 to hire us to work for YOU!